by Stacy Zemon
Over the years in this business, I’ve seen it happen time and time again. Two DJs who are the best of friends get together to form a new company. And then…sooner or later, their relationship then their business goes “South” and crashes hard.
I’ve had this painful experience and if you’d like to avoid it like the plague, here’s some advice from someone who’s “been there and done that” to consider.
The Pros and Cons
Starting and thriving in a mobile DJ business by yourself can be a difficult and lonely proposition. It can be much more rewarding if you have the right partner to share the journey. Still, the question of whether you should have a partner in business is a tricky question.
A partner gives you a shared responsibility for the company so you don’t have to bear the entire weight yourself. Sometimes, two people together are greater than the sum of the whole (if they have a synergy of skills). Just as often, two people together are less than the sum of the whole (if they fight all the time).
Unfortunately, you may not always agree with your partner. Disagreements (if not settled) can kill your company. If partners don’t think they are working equally as hard, conflicts arise. Remember, it is far easier to go into business with someone than get out of one.
Finding a Complimentary Partner
You need to look for a partner with skills that complement your own. If you are good at sales and marketing, team up with someone who is good at technology and operations. This will also provide an easy way to split up the company’s responsibilities once you’re both working there.
Think about a few critical questions before you leap:
- How well do you two argue together?
- How does the other person react when the chips are down?
- How has your prospective partner handled success and failure?
- What is his or her attitude toward money?
- What are your visions for how the company should grow?
- Do you share similar ethics and values in life?
Doing It Right
Whether you are starting a new DJ business or considering bringing in a partner to your existing enterprise, it is critically important to take the necessary legal steps contractually. Partnerships are marriages, so there needs to be an agreement in place if somewhere in the life of your business, the interests of the partners head down different roads.
Make a shareholder’s agreement that states all these things. With a single partner and a 50-50 split in voting rights, there needs to be tie breakers. Talk to your attorney about a “Texas draw” provision. This is where one partner offers to buy out the other partner. This partner then has the choice of either taking the buyout offer from you or buying you out for the same price. This ensures fair offers by both partners. Without a way for partners to resolve their differences, principals can get locked in a death spiral that can result in the demise of your entire company.
There key financial steps you should take prior to forming a business partnership. Decide who will keep track of your company’s money and select an outside firm to provide oversight. Pick an accountant with which neither of you have personal ties. Put a good bookkeeping system in place and stick with its reporting. Understand cash-flow statements.
The Importance of Good Communication
Finally, partners also need to have excellent communication skills and should be able to talk honestly about any issue. I suggest you implement an agreement between the two of you that you will never be angry with your partner for more than 24 hours without discussing the issue. It is your responsibility never to divulge your differences with your partner to your DJs or office staff.
Only go into business with someone you know, trust and respect. You’ll be spending a lot of time together, and your mutual success rides on the strength of your relationship. “Marriage” can be a wonderful thing but it always takes a lot of work. Make sure the benefits you receive from your partnership are worth the effort.
Do you have business partner rules that have created longevity for your business?
Stacy Zemon – Publisher & Chief Scribe
Stacy Zemon is a distinguished industry leader who is widely considered an authority on the DJ business. She is a veteran disc jockey, writer for DJ Times magazine and author of the world’s best-selling DJ books. For the complete story about Stacy’s career, click here. To check out her copywriting and business consulting services, click here. You can write to her c/o Stacy@test.promobiledj.com.